28.In the short run:
A.Most fixed costs are controllable
B.Most fixed costs are not controllable
C.Most variable costs are not controllable
D.Both fixed costs and variable costs are controllable
E.Neither fixed costs nor variable costs are controllable
29.A useful step for estimating controllable costs is:
A.Separating product costs from administrative costs.
B.Separating contribution costs from product costs.
C.Separating variable costs from fixed costs.
D.Separating variable costs from product costs.
E.Separating fixed costs from product costs.
30. If fixed costs are $15,000, profit before income taxes is $55,000, revenues are $160,000, variable costs are $90,000, contribution margin is:
31.The term “contribution margin” denotes:
A.The value attained by subtracting variable and fixed costs from revenues.
B.The value attained by subtracting variable and fixed costs from net income.
C.The value attained by subtracting fixed costs from revenues.
D.The value attained by subtracting variable costs from revenues.
32.Contribution margin statements:
A.Can be utilized to evaluate the effect of possible activity changes on profit before taxes.
B.Cannot be utilized to evaluate the effect of possible activity changes if those changes also change fixed costs.
C.Will not provide an alert if cost behaviors vary from those expected.
D.Identify variable and fixed costs but will not address changes in revenues.
33.The major disadvantage of the account classification method is
A.While some cost items will exactly correspond to a fixed or variable cost, other cost items will not.
B.The difficulty associated with implementing it.
C.Small companies may have an expansive account list making the task hard.
D.Incorrectly classifying costs could lead to minor errors in cost estimates.
34.Account classification involves systematically:
A.Classifying a company’s list of revenue accounts into fixed and variable categories.
B.Classifying a company’s list of accounts into asset, liability, shareholders’ equity, revenue, and expense accounts.
C.Classifying a company’s list of cost accounts into fixed and variable categories.
D.Classifying a company’s list of accounts into revenue and expense accounts only.
35.The change in variable costs is calculated as:
A.The sum of the variable costs divided by the volume of activities which is then multiplied by the change in activity levels.
B.The sum of the variable costs multiplied by the change in activity levels.
C.The sum of the variable costs divided by the activity levels which is then multiplied by the change in volume of activities.
D.The sum of the variable revenues divided by the volume of activities which is then multiplied by the change in activity levels.
36.Bill and Ted recently opened a plumbing business. The business currently has $500 monthly depreciation for its two trucks as its only fixed costs. During the first month, the company had 10 service calls each earning $99 revenue per call and variable costs amounting to $20 per call for plumbing supplies and gas. How much is Bill and Ted’s contribution margin for its first month?
37.Spudz Toys estimated production of 2,000 stuffed dogs each with a selling price of $8.00. If the variable cost per stuffed dog is $2.00 and fixed costs are $5,000, what is estimated profit?